FFP: One Week On

A week has passed since news broke of Birmingham City being placed under a transfer embargo with no news of any change. With the transfer deadline now 24 days away, what needs to happen for Birmingham City to be released from this period of limbo?

As ever, I have done my best to source this story via multiple independent sources to try to get a complete picture of what is happening at the club.

Despite asking the EFL and the club for comments, I have received only a pro forma “no comment” from the EFL, while BCFC have not been in touch at all.

My understanding is that as of the time of writing, nothing has changed. The club are still embargoed by the EFL and Kristian Pedersen remains unregistered.

Hang on – Pedersen played two games in Austria and Germany?

The fact Pedersen played in Austria and Germany is good news. This means that my fears that there may be problems with insuring Pedersen were unfounded, and that he is only one piece of paper away from being able to play for the club.

Like a trialist, Pedersen is allowed to play for Birmingham City in friendlies as those games are not regulated by the EFL.

However, any competition such as the Championship or the EFL Cup requires players to be registered and unless the situation surrounding Pedersen is sorted, then he will not be able to play.

Isn’t this just a temporary situation?

All embargoes are temporary situations – after all, “never” is a long time.

The question should really be how temporary the situation is – after all, with only 24 days left until the transfer deadline on August 9th – and then a further 22 until the loan deadline on August 31st, there isn’t all that much time to get sorted out.

As the club have said, they are in constant dialogue with the EFL.

The club will have filed accounts and future cashflow projections in March of this year with the EFL which will then have been discussed over April, May and June.

The EFL will have given guidance to the club as to what needs to have been done to remain within FFP limits – but there have to be deadlines otherwise there is no point in having FFP rules.

That deadline passed on July 1.

I’m not an accountant, but from what I do know I don’t think it’s now possible to change last year’s FFP result.

This means it’s now all about improving the picture for the year ahead to get back into boundaries.

Wages will have decreased for this season as it stands, due to the return of loan players from last season but they will have to be replaced if Blues are to be competitive.

The bigger deal is going to be about proving to the EFL that the club are bringing in more money this year to offset losses and to become more self-sustainable.

However, even this has problems.

The naming rights deal was done by Blues to allow more money to put into the club by the owners but there are “fair market value” rules within FFP that mean the EFL have to agree Blues have not inflated the figures to avoid FFP restrictions.

The initial figure put forward by Blues would likely have solved any FFP problems they had but it was not accepted by the league.

This link gives a good indication of what those naming rights are worth – and the truth is, it’s not a lot.

What needs to happen?

I’ve said it before and I’ll say it again, based on what I’ve heard from different people in different places this is a problem because the relevant people are not talking to each other.

The consensus of opinion from everyone I have spoken to is that this situation would have been avoided had club CEO Ren Xuandong listened to his experienced senior staff at the club.

With just over three weeks left to fix the situation, I hope that will change and that Ren will heed BSH Chairman Zhao Wenqing’s call for unity among the staff.